FHA

Investing in any type of market can be a tricky prospect these days because of recent history of unexpected crashes. However, for those who have been thinking about investing in mortgage-backed securities, the prospect is even scarier because of the downfall of the housing market in 2008 and the struggles associated with both Fannie Mae and Freddie Mac.

Despite the suffering economy, some experts say Ginnie Mae’s mortgage-backed securities are safe to invest in and still offer a good chance for growth. So is investing in Ginnie Mae really a good idea considering the volatility of the housing market?

The government has attempted to help out homeowners struggling with underwater mortgages in the past, but so far, there hasn’t been much success with the FHASecure or Hope for Homeowners programs. Though the number of underwater mortgages in the U.S. has decreased since March, it’s been due to an increase in foreclosures, not home values. That’s why a new option has just been set in motion, known as the FHA Short Refinance program.

Homeowners Walking Away from Underwater Mortgages

If you’ve been excited by the incredibly low mortgage interest rates we’ve witnessed for the past few months, you’re not alone. Consumers and housing experts alike have been amazed by these rates, which to date are the lowest on record.

However, while everyone is marveling at mortgage rates, no one’s really doing anything to take advantage of them, as evidenced by record-low home sales. So why on Earth is no one jumping on them when they’re going to start climbing again sooner or later?

If you’re suffering from an underwater mortgage but continue to make all of your payments on time, the FHA may be able to bail you out. The administration is offering a refinancing option that could help homeowners whose home values have dropped far below their loan amounts via a new program.

The FHA Short Refinance Option

A new report shows that existing sales sank 27.2 percent in July, which is the biggest one-month drop ever. According to the National Association of Realtors (NAR), this percentage represented a seasonally-adjusted annual rate drop to 3.83 million sales from 5.26 million the month before.

The Market Continues to Lose Sales

Economists say that a great way to stimulate the economy without spending any more money is by taking advantage of lowered mortgage interest rates.

More specifically, Morgan Stanley economist, David Greenlaw, says by making it easier for homeowners to refinance their homes, Americans could save more money, which could then prompt them go out and spend more instead. In his report titled Slam Dunk Stimulus, Greenlaw determined that by relaxing refinancing requirements for roughly 37 million mortgage loans that are already owned or backed by Freddie Mac, Fannie Mae and the FHA, $46 billion in savings could be the result (Wall Street Journal).

Unemployment and Mortgage Payments

Suppose you lose a job but still have monthly mortgage payments to make. Unfortunately, few people can keep up with their mortgage payments with only unemployment benefits to rely on. Plus, if your benefits run out before you find your next job, the situation is likely to become desperate.

Losing your house is perhaps the biggest financial risk an average American would ever face. Let us look through the steps you can follow to reduce the chance of foreclosure.

Steps to Find Help With Mortgage Payments if Unemployed

As a result of lending standards getting a tad bit tighter, the Department of Housing and Urban Development announced that it now intends to require borrowers to have scores of at least 500 to qualify for an FHA-insured mortgage loan. This is the first time that the agency will have a minimum score requirement.

While this change could affect a handful of prospective borrowers, HUD says that it shouldn’t make a significant difference since most loans issued in the second quarter of 2010 were issued to those with scores above 620, less than 1 percent went to those with scores below 580 and none were issued to those with scores below 500 (CNN Money).

If you’ve been looking forward to taking advantage of a government-backed mortgage through the Federal Housing Administration – and have bad credit – you may have a harder time getting financed. The agency announced on Wednesday its plans to make adjustments that will help strengthen its weakening finances, unfortunately, at the expense of bad-credit borrowers.

Federal Housing Administration Adjustments

There are many resources available for potential first time home-buyers. One option is through the U.S. Department of Housing and Urban Development (HUD) as they have incentives and procedures in place to make purchasing a HUD foreclosed property enticing to dwelling shoppers. When home-owners default on an FHA (Federal Housing Administration) insured mortgage the home eventually becomes the property of HUD. To mitigate the loss caused by the foreclosure, HUD will sell off the property.

In general, almost anyone can qualify for purchasing a HUD foreclosed property. Like purchasing any other type of home, money for a down-payment is a necessity, as well as the ability to qualify for a mortgage. HUD first tries to seek home buyers who are interested in making the property their primary resident. However, if after the required waiting period the property does not sell to an “owner-occupant,” then investors may also purchase the HUD properties.